What is Entrepreneurial Orientation (EO)?

Succinctly, EO describes when one organization is being more entrepreneurial than another.

Firms are described as having an entrepreneurial orientation (EO) when they support and manifest entrepreneurial behavior with sufficient regularity for this behavior to become a defining organizational attribute or characteristic (Covin & Wales, 2019). As an organizational attribute, EO permeates a firm’s managerial philosophies and decision-making practices, its configuration of organizational elements, as well as its strategic behavior (see Wales, Covin, & Monsen, 2020).

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As a management style, EO captures the goals, beliefs, logics, decisions, and communications which demonstrate organizational commitment to new value creation.

Finally, organizational entrepreneurial behavior is ultimately manifest in terms of externally directed new entries (products, services, ventures, etc.) targeted at the exploitation of opportunities for new value creation in the market.

In brief, entrepreneurially-oriented firms support and exhibit a sustained pattern of new entry over time that is generally characterized by innovation, proactiveness, and risk-taking (Wales, 2016). These and other contextually relevant dimensions such as competitive aggressiveness or autonomy (Lumpkin and Dess, 1996) may be explored in aggregate or isolation (Covin & Wales, 2012), though scholars recommend reporting both aggregate and individual effects when conducting research exploring a firm’s EO (Miller, 2011; Wales, 2016).